Property purchase - How to finance it best?

Good evening dear forum community,

my wife and I want to build in 1-2 years. But we already have the right plot of land in sight NOW. Now the question of financing arises. It costs ~ 40,000.

Our (financial) situation looks as follows:

2 x building savings contracts 50,000 (each has about 14,000 in it). Ready for allocation in about 2.5 years.

about 17,000 in a daily allowance account

Then I still have a building savings contract, which is super-interesting at 4%, with 12,000 on it. I don’t want to completely kill it and actually want to leave at least 5,000 on it for hard times.

My plan so far is to clear out the daily allowance account and take another 7,000 from the building savings contract. Then I would have 24,000 cash and would still have to take out about 16,000.

Now I looked online for cheap loans. 16,000 costs me 16,700 in 24 months at 4.29% p.a. (monthly rate ~ 700,-).

Then the plot of land would be paid off after two years. Then the building savings contracts are finished and we start with 50,000 + X equity.

What do you think of the plan?

Looking forward to your opinions.

Best regards

Chris.

You first have to find a bank that is willing to finance under 50,000 at current conditions. I've heard some nice stories from a colleague Less credit = higher interest rates.

Morning,

... , except for the somewhat high interest rate. Is that a normal loan, not a mortgage loan?!

Yes, it is a normal loan. Not a construction financing. My main bank (which advertises with a famous athlete) only grants mortgage loans starting from an amount of 50,000 EUR. For that, I of course save myself a land charge registration and I would pay for the land in cash.

Then it can only be the Ing-Diba, right? Still, you should run through the entire financing, because buying a plot and not managing the rest is an expensive playground.

Hello,

of course my wife and I are currently working on "simulating" the financing. We create Excel files for all accounts and look at what income and expenses there are. In the end, we know what we need to live on and can estimate quite well how high the monthly installments for a loan can be. Only additional savings of cash (overnight money) will hardly be possible at first. But then we are already paying off the loan for the plot of land. That's just how it is.

Do you have any tips for me on how to get a cheap loan? Ideally, I would like to get it from my building society. Then I would have a fixed contact person locally. But they will hardly be able to keep up with the conditions of a direct bank or internet bank or whatever. Or do you think there is a way I can get 15k from them without them wanting a land charge? After all, we already have about 40k there and they want to do the major financing when we build the house.

Best regards

Hello,

... Ideally, I would get it from my building society. Then I would have a fixed contact person on site. However, they will hardly be able to compete with the conditions of a direct bank or internet bank or whatever. Or do you think there is a way for me to get 15k from them without them wanting a land charge entry? After all, we already have about 40k there and they want to do the major financing when we build the house.

Don’t ask here in the forum – no one can give a proxy answer here

Go with your thoughts/ideas to your contact person at the building society and listen to what they say and what proposals they make to you. You can then discuss these here again – the other way around won’t get you anywhere!

Kind regards